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Poltava Petroleum Company Starts Drilling New Wells

Kyiv, February 8, 2018 – JV “Poltava Petroleum Company” (PPC) announces decision to resume its drilling program in Ukraine. According to the company’s new development strategy for 2018, drilling of the first well E308 should begin at Yelizavetivskyi deposit by the end of February. Projected well depth is 3000 meters. As of today, pre-drilling activities are underway while the tender to select a drilling operator is being finalized. Enhancement and workover of existing own and leased wells will also continue.

One of the primary factors motivating the decision was the amendment adopted by the Ukrainian Parliament in late 2017, which reduced royalty rates for new gas wells.

Ukraine’s new fiscal system for the gas industry is one of the most favorable in Europe. We actively supported this initiative, in particular as a member of the Association of Gas Producers of Ukraine. Such fiscal policy allowed us to revise our work plan and re-evaluate previously uneconomical projects. This will contribute to active development of our company and the Ukrainian gas industry as a whole,” thinks Victor Gladun, General Director of Poltava Petroleum Company and Acting CEO of JKX Oil & Gas, Plc.

Successful enhancement and workover projects at several existing wells served as an additional catalyst to revisal of the company’s strategy. Thanks to the effective work of PPC’s updated geological and technical teams under the leadership of Volodymyr Maksymov and Mykola Orynchak, in January 2018 the company managed to increase production volume at Novomykolayivska field by more than 30%. Renewal of the drilling program was the logical next step following the positive results of previous projects, in particular the sidetracking of well Ign101Z of Ignativske deposit performed at 2.392-2.445 m, whose debit now amounts to 59.5 tcm of gas and 55 barrels (8.7 m3) of condensate per day; as well as successful workover of well HH43 of Ignativske deposit leased from NJSC “Nadra Ukrayiny”.

PPC intends to continue scaling up such operations to achieve positive production growth as early as 2018.